CHAPTER 3 – ACTIVITY

1. How does the firm make money?

Ans.
Firms make money by locating customers or determining what things buyers
desire. New customer will increase profits through higher overall sales. Another one
how firm make money is raise prices. Increasing the price of products or services will
increase total sales and eventually profits. And last selling more products. Enticing
customer to purchase a higher number of goods or services will lead to higher net
profit.

2. Employee Engagement: How should firm deal with it?

Ans.
Improving employee engagement necessitates buy-in from all members of
your leadership team, and a successful engagement strategy necessitates careful
planning. Don't let this stop you; a highly engaged staff will increase profitability,
productivity, and employee retention. However, there are a number of low-lift
employee engagement initiatives you can implement right now to see actual results.
In this post, we'll look at 16 employee engagement solutions that you can use as
both short-term and long-term fixes to increase employee engagement.

3. How should a firm organize to turn the formulated strategy into action?
Ans.
Organizational structure is used to put the formulated strategy into effect.
Functional structure is one of the structures that can aid. Using a functional structure
creates advantages and disadvantages. An important benefit of adopting a functional
structure is that each person tends to learn a great deal about his or her particular
function. By being placed in a department that consists entirely of marketing
professionals, an individual has a great opportunity to become an expert in
marketing. Thus, a functional structure tends to create highly skilled specialists.
Second, grouping everyone that serves a particular function into one department
tends to keep costs low and create efficiencies. Also, because all the people in a
particular department share the same background training, they tend to get along
with one another. In other words, conflicts within departments are relatively rare.
Using a functional structure also has a significant downside: executing strategic
changes can be very slow when compared with other structures. Suppose, for
example, that a textbook publisher decides to introduce a new form of textbook that
includes “scratch and sniff” photos that let students smell various products in addition
to reading about them. If the publisher relies on a simple structure, the leader of the
firm can simply assign someone to shepherd this unique new product through all
aspects of the publication process.